AGL 40.00 Decreased By ▼ -0.20 (-0.5%)
AIRLINK 130.30 Increased By ▲ 1.19 (0.92%)
BOP 6.38 Decreased By ▼ -0.22 (-3.33%)
CNERGY 4.02 Decreased By ▼ -0.01 (-0.25%)
DCL 8.80 Increased By ▲ 0.35 (4.14%)
DFML 42.70 Increased By ▲ 1.45 (3.52%)
DGKC 87.50 Increased By ▲ 0.50 (0.57%)
FCCL 33.72 Increased By ▲ 0.37 (1.11%)
FFBL 65.90 No Change ▼ 0.00 (0%)
FFL 10.67 Increased By ▲ 0.13 (1.23%)
HUBC 112.96 Increased By ▲ 2.26 (2.04%)
HUMNL 16.03 Increased By ▲ 0.80 (5.25%)
KEL 4.80 Increased By ▲ 0.02 (0.42%)
KOSM 7.94 Increased By ▲ 0.11 (1.4%)
MLCF 42.04 Increased By ▲ 0.14 (0.33%)
NBP 61.00 Increased By ▲ 0.50 (0.83%)
OGDC 184.90 Increased By ▲ 2.10 (1.15%)
PAEL 25.45 Increased By ▲ 0.09 (0.35%)
PIBTL 7.26 Increased By ▲ 1.00 (15.97%)
PPL 146.80 Decreased By ▼ -1.01 (-0.68%)
PRL 24.60 Increased By ▲ 0.04 (0.16%)
PTC 16.42 Increased By ▲ 0.18 (1.11%)
SEARL 70.60 Increased By ▲ 0.10 (0.14%)
TELE 7.34 Increased By ▲ 0.04 (0.55%)
TOMCL 36.28 Decreased By ▼ -0.02 (-0.06%)
TPLP 8.13 Increased By ▲ 0.28 (3.57%)
TREET 15.68 Increased By ▲ 0.38 (2.48%)
TRG 51.46 Decreased By ▼ -0.24 (-0.46%)
UNITY 27.50 Increased By ▲ 0.15 (0.55%)
WTL 1.27 Increased By ▲ 0.04 (3.25%)
BR100 9,885 Increased By 42.8 (0.43%)
BR30 30,252 Increased By 216 (0.72%)
KSE100 92,994 Increased By 473.1 (0.51%)
KSE30 28,861 Increased By 74.9 (0.26%)

ISLAMABAD: The Tax-to-Gross Domestic Product (GDP) ratio drastically decreased from 9.22 percent in 2021-22 to 8.77 percent during 2023-24.

The Federal Board of Revenue (FBR) report revealed that the tax-to-GDP ratio is a key metric for assessing a country’s tax revenue in relation to its GDP size.

It offers insight into the general trajectory of tax policy and allows for global comparisons of tax revenues relative to economic scales. This ratio also reflects how effectively a nation’s government allocates its economic resources through taxation.

Islamabad striving for 13.5pc tax-to-GDP ratio, US told

Typically, developed nations exhibit higher tax-to-GDP ratios compared to developing countries. Higher tax revenues enable a country to invest more in essential areas such as infrastructure, healthcare, and education.

According to the World Bank, tax revenues that exceed 15 percent of a country’s GDP are crucial for fostering economic growth and reducing poverty.

Over the past few years, the FBR has implemented various policy and enforcement measures. These initiatives, coupled with the dedicated efforts of FBR’s top management, have begun to yield significant results, manifesting as robust growth in tax revenues. There was a notable 30 percent increase in FBR tax revenues during 2023-24, which improved the Tax-to-GDP Ratio from 8.54 percent to 8.77 percent.

With the continued growth in tax revenues, it is anticipated that the Tax-to-GDP ratio will further improve in the coming years.

Over the past four years, the proportion of direct taxes to GDP has seen a positive trend, increasing from 3.10 percent in 2020-21 to 4.27 percent in 2023-24. This shift towards a greater reliance on direct taxes, coupled with a decreasing share of indirect taxes, is a promising development for Pakistan’s tax structure, FBR report added.

Copyright Business Recorder, 2024

Comments

200 characters
Aamir Nov 08, 2024 08:23am
The govt should cut expenses accordingly as economy is finished
thumb_up Recommended (0) reply Reply
SAd Nov 08, 2024 09:45am
I wonder how much bias can you have. How can you compare to 23 with 21 by ignoring 22 completely in the heading. This is how you spread propaganda and create false narrative.
thumb_up Recommended (0) reply Reply